Home ownership for some is the ultimate statement that they have made it in life. And for many, it also represents a significant portion of their net worth. It’s an asset that can become an appreciating investment--or a financial albatross around their neck. This is not a discussion about whether to buy or rent, where you should live, or what a home is really worth. Instead I want to help you look at something often overlooked: what to do with your home when a family is growing or when two families combine into one household through marriage.

Here’s our example: A young couple has just recently married. He owns a large house, she a smaller one. They have five kids between them. Their initial thought is to sell both homes and buy a brand-new, bigger house customized to their liking. They also consider buying an older home, and just fix up the parts inside that are most important to them to make it fit their new lifestyle. Or is there another option? What should they do? What makes the most financial sense in this scenario?

Who doesn’t love brand-new shiny things? The allure of a custom home is so attractive. Top-of-the-line appliances, flooring and other amenities. This couple needs five bedrooms, but the real gem of a custom home for them is the kitchen. She loves to cook and wants the kitchen to be the focal point of the house. However, in order to get the new home they want in the neighborhood they want, they'll spend way over their budget. So they look at a few smaller options, but they don’t stand up to the top-of-the-line home they saw.

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Does this sound familiar? Be careful here when someone tells you that you qualify to buy this much house, because it may over-extend you more than you know. Making that house payment on the new place means you may not be able to take vacations, put the money away in retirement accounts you’ll need later, or in their case also make it impossible to put money into the college accounts of the kids.

On the other hand, while looking at the older homes as a second option, our young couple doesn’t see exactly what they want. They figure they can remodel a fixer-upper to create their perfect home. But, once they start calculating the costs of building that new kitchen (with the image of the custom home still in their minds), it begins to add up almost to the cost of the brand new house.

Throw in the other unknowns that come with buying an older home. It also might need upgrades to the infrastructure -- a roof, air conditioning, or plumbing.

Fixing up an old house can be fun and rewarding, but it might also drain your funds more than buying a new one outright. Tom Hanks and Shelley Long learned a few harsh lessons about their house and their relationship in the classic comedy The Money Pit. The title of the movie is now almost universally used as a phrase to describe a situation where the homeowners become house poor due to taking on too much in terms of repairs or haven’t anticipated what it really costs to operate their home.

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One thing that I haven’t mentioned to this point is something that I think many overlook when shopping for that new dream house. This couple still needs to sell two homes! Both will probably need a little work done to make ready to sell. That is an investment of not only money, but time in this whole process. Has our couple budgeted this into the equation? Moving can be disruptive for both sets of kids who attend new schools and are away from their old neighborhood friends. Where’s the financial impact of that in the calculations we make on new mortgage payments?

As financial professionals, our real value to clients goes beyond investment recommendations; it is uncovering the questions that are often overlooked. We asked this couple if they might consider keeping the bigger house and selling the smaller one.

They could put the proceeds from the sale of the smaller home toward upgrading the kitchen in the home they kept. Result: they can create the dream kitchen they saw in that new custom home. And with the bigger home they keep, there aren’t many unknowns with regards to upgrading or repairing the infrastructure (no bathtub falling through the floor).

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The biggest unknown to this couple is what does a household of seven (parents and the five kids) really cost to run? A new budget needs to be planned, and proper allocation towards their education and retirement goals need to be assessed. Your own solution may have been different, but ultimately our goal as financial planners should be to give a family peace of mind and give them a life to enjoy on their new journey without felling trapped in their home.